Opener/ Buyer/Importer:
The person who opens the L/C is known as opener/ buyer/importer of the L/C. The buyer and
the seller conclude a sales
contract providing
for
payment
by
documentary credit.
The Bank issuing the L/C in favor of exporter is known as opening Bank. The
opening bank opens L/C on request
of
importer according to application of the
importer.
Advising Bank:
The Bank through L/C is advised their agent (correspondent Bank) abroad. The
duty of the advising Bank is to authenticate the message so that is to the seller can act on it without any fear of forgery etc.
Seller and exporter in whose favor the L/C
are opened. The beneficiary
is normally
the
seller of good who receive payment
under documentary credit. If has compiled with terms and conditions thereof.
The Bank that is authorized to handle (purchase) the documents under the L/C in
the
exporting country is known as negotiating Bank. L/C will stipulate either a
notified bank to negotiate (restricted
L/C) or any bank can negotiate
in the seller’s
country (unrestricted L/C).
Reimbursing Bank:
The Bank that is (by the L/C issuing Bank) to effect reimbursement
is known as
reimbursing bank. Reimbursing Bank authorized to honor the reimbursement claims in settlement of negotiation/ accepting/ payments lodged with its by the paying/ negotiating/ accepting Bank.
Confirming Bank:
A Confirming Bank is one which adds the guarantee to the credit opened by another
bank. Therese
undertaking the responsibility of payment/ negotiating/ acceptance
under the credit in addition to that of the issuing Bank. A confirming Bank normally does so it requested by the issuing Bank.